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NXP (NXPI) Down 3.2% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for NXP Semiconductors (NXPI - Free Report) . Shares have lost about 3.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is NXP due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
NXP Semiconductors Q2 Earnings Meet, Revenues Fall Y/Y
NXP Semiconductors delivered second-quarter 2024 non-GAAP earnings of $3.20 per share, which was in line with the Zacks Consensus Estimate. The figure decreased 6.7% year over year.
Revenues of $3.13 billion beat the Zacks Consensus Estimate by 0.04%. The figure declined 5% from the year-ago level.
The company witnessed sluggishness in the Automotive, and Communication Infrastructure & Others markets.
Nevertheless, strong momentum across the Industrial & IoT, and Mobile end markets were positive.
End-Market Detail
Automotive generated $1.728 billion in revenues (55.3% of the total revenues), reflecting a year-over-year decrease of 7%. The figure surpassed the Zacks Consensus Estimate of $1.72 billion.
Revenues from Industrial & IoT were $616 million (19.7% of the total revenues), up 7% from the prior-year quarter. The reported figure lagged the consensus mark of $624 million.
Revenues from Mobile were $345 million (11% of the total revenues), up 21% from the year-ago period. The figure lagged the Zacks Consensus Estimate of $350.2 million.
Communication Infrastructure & Others generated $438 million in revenues (14% of the total revenues), down 23% year over year. The reported figure beat the consensus mark of 431.2 million.
Operating Results
The non-GAAP gross margin was 58.6%, which expanded 20 basis points (bps) from the year-ago quarter’s level.
Research and development (R&D) expenses were $594 million, up 0.8% year over year. Selling, general and administrative (SG&A) expenses decreased 1.5% year over year to $270 million. As a percentage of revenues, R&D expenses expanded 110 bps year over year to 19%, while SG&A expenses expanded 30 bps year over year to 8.6%.
The non-GAAP operating margin of 34.3% for the reported quarter contracted 70 bps from the prior-year period.
Balance Sheet & Cash Flow
As of Jun 30, 2024, the cash and cash equivalent and short-term deposits balance was $3.26 billion, down from $3.3 billion as of Mar 31, 2024.
The long-term debt was $9.681 billion at the end of the quarter under review compared with $10.178 billion at the end of the last reported quarter.
NXPI generated a cash flow of $761 million in the second quarter of 2024, down from $851 million in the previous quarter.
The company’s capex investment was $184 million in the reported quarter. NXPI generated a free cash flow of $577 million in the quarter.
During the second quarter, the company made dividend payments of $260 million and repurchased shares worth $310 million.
Guidance
For the third quarter of 2024, NXP Semiconductors expects revenues of $3.150-$3.350 billion, indicating a year-over-year fall of 5% at the mid-point.
It expects the non-GAAP gross margin between 58% and 59%. The non-GAAP operating margin is anticipated between 34.2% and 36%.
The company anticipates non-GAAP earnings to be $3.21-$3.63 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -5.37% due to these changes.
VGM Scores
Currently, NXP has a subpar Growth Score of D, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise NXP has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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NXP (NXPI) Down 3.2% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for NXP Semiconductors (NXPI - Free Report) . Shares have lost about 3.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is NXP due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
NXP Semiconductors Q2 Earnings Meet, Revenues Fall Y/Y
NXP Semiconductors delivered second-quarter 2024 non-GAAP earnings of $3.20 per share, which was in line with the Zacks Consensus Estimate. The figure decreased 6.7% year over year.
Revenues of $3.13 billion beat the Zacks Consensus Estimate by 0.04%. The figure declined 5% from the year-ago level.
The company witnessed sluggishness in the Automotive, and Communication Infrastructure & Others markets.
Nevertheless, strong momentum across the Industrial & IoT, and Mobile end markets were positive.
End-Market Detail
Automotive generated $1.728 billion in revenues (55.3% of the total revenues), reflecting a year-over-year decrease of 7%. The figure surpassed the Zacks Consensus Estimate of $1.72 billion.
Revenues from Industrial & IoT were $616 million (19.7% of the total revenues), up 7% from the prior-year quarter. The reported figure lagged the consensus mark of $624 million.
Revenues from Mobile were $345 million (11% of the total revenues), up 21% from the year-ago period. The figure lagged the Zacks Consensus Estimate of $350.2 million.
Communication Infrastructure & Others generated $438 million in revenues (14% of the total revenues), down 23% year over year. The reported figure beat the consensus mark of 431.2 million.
Operating Results
The non-GAAP gross margin was 58.6%, which expanded 20 basis points (bps) from the year-ago quarter’s level.
Research and development (R&D) expenses were $594 million, up 0.8% year over year. Selling, general and administrative (SG&A) expenses decreased 1.5% year over year to $270 million. As a percentage of revenues, R&D expenses expanded 110 bps year over year to 19%, while SG&A expenses expanded 30 bps year over year to 8.6%.
The non-GAAP operating margin of 34.3% for the reported quarter contracted 70 bps from the prior-year period.
Balance Sheet & Cash Flow
As of Jun 30, 2024, the cash and cash equivalent and short-term deposits balance was $3.26 billion, down from $3.3 billion as of Mar 31, 2024.
The long-term debt was $9.681 billion at the end of the quarter under review compared with $10.178 billion at the end of the last reported quarter.
NXPI generated a cash flow of $761 million in the second quarter of 2024, down from $851 million in the previous quarter.
The company’s capex investment was $184 million in the reported quarter. NXPI generated a free cash flow of $577 million in the quarter.
During the second quarter, the company made dividend payments of $260 million and repurchased shares worth $310 million.
Guidance
For the third quarter of 2024, NXP Semiconductors expects revenues of $3.150-$3.350 billion, indicating a year-over-year fall of 5% at the mid-point.
It expects the non-GAAP gross margin between 58% and 59%. The non-GAAP operating margin is anticipated between 34.2% and 36%.
The company anticipates non-GAAP earnings to be $3.21-$3.63 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -5.37% due to these changes.
VGM Scores
Currently, NXP has a subpar Growth Score of D, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise NXP has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.